Negligent misrepresentation is a concept that arises in contract law. In general, misrepresentation refers to a situation in which someone makes a false statement for the purpose of making a deal, resulting in the person who relies on the statement experiencing harm. In the case of negligent misrepresentation, someone makes a statement without any grounds for knowing whether it is true or not, and an aspect of carelessness is involved. If a car dealer claims that it believes the previous car owner changed the oil without actually knowing it to be true, it may be committing this type of misrepresentation.
This differs from innocent and fraudulent misrepresentation. In innocent misrepresentation, someone making a statement believes that a statement is true when it is not. This person may be relying on outdated information or incorrect information from someone else, which that person has reason to believe is true. In fraudulent misrepresentation, the statement is a lie and someone knows that it is a lie or disregards evidence that it is a lie.
Misrepresentation in a contract does not necessarily provide grounds for a suit. In the example of a car dealer above, if the customer bought the car and the oil had not been changed regularly but no damage was caused, the customer cannot later sue the dealer. The customer has suffered no harm as a result of the false statement. If, on the other hand, the engine seizes because the oil was never changed, the buyer can sue the dealer because the buyer has suffered harm.
The law is also careful to distinguish between misrepresentation and what is known as “puffery.” Puffery is language that is generally understood to be subjective and not intended to be understood literally. When a dealer says “this is a great car to drive,” this is an example of puffery, and the buyer cannot later sue on the grounds that it is not a great car to drive. If, on the other hand, the dealer says “the steering on this car is very responsive” and it is not, this may be considered misrepresentation because it is a statement that appears factual but is actually false.
People can avoid engaging in negligent misrepresentation by verifying the facts before they speak; if a waiter is asked, for example, if a dish contains tomatoes, the waiter can say “let me check with the kitchen.” Misrepresentation is a common situation when people feel under pressure to close a deal and negligence often happens when someone makes a statement carelessly in the heat of the moment. Telling a buyer “not to my knowledge, but I can check on that” will often provide time to verify the facts without losing the deal.
